STAND. COM. REP. NO.  131

Honolulu, Hawaii

                , 2011

RE:   H.B. No. 1101

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Transportation, to which was referred H.B. No. 1101 entitled:

"A BILL FOR AN ACT RELATING TO MOTOR VEHICLE REGISTRATION,"

begs leave to report as follows:

     The purpose of this bill is to improve the Department of Transportation's (DOT) ability to construct, operate, and maintain the State Highway System and maintain the solvency of the State Highway Fund by increasing the State motor vehicle registration fee from $25 to $45.

     DOT and the Department of Customer Services of the City and County of Honolulu (DCS) testified in support of this bill.  The Hawaii Transportation Association and a concerned individual testified in opposition to this measure.  The Tax Foundation of Hawaii provided comments.

     Currently, DOT estimates the costs of the routine operation and maintenance of Hawaii's Highway System, which consists of over 2,400 lane miles of roadway, to be $115,000,000 annually.  The dramatic downturn in both the national and state economies over the last several years has continued to have a negative impact on State Highway Fund monies with revenues failing to keep pace with expenditures for the operation, maintenance, and construction of State highways.  The shortfall is due in part to rising fuel costs and decreasing fuel consumption that has resulted in decreased fuel tax revenues.  As a result, our land transportation system has failed to address increased transportation demands with project needs far outpacing available resources.  Although recent indicators have suggested that economic recovery is beginning, expectations are that the economic recovery will be slow and may take several years.  Without additional funding, the State Highway Fund will lack the necessary revenues for even routine maintenance and operation of our roadways, let alone the construction of new and necessary roadways and appurtenances.

     Your Committee finds that the increase in motor vehicle registration fees proposed in this measure is projected to generate an additional $22.9 million in revenues for the State Highway Fund.  This will continue to allow DOT to provide a safe, efficient, and effective land transportation system for the movement of people and goods serving a benefit to both residents and visitors alike.

     However, concerns were raised by DCS that additional time will be needed to upgrade computer programs used for the registration of motor vehicles to address this rate increase.  Accordingly, your Committee has amended this bill by changing the effective date to December 1, 2011, to provide DCS with additional time.

     As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1101, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1101, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Transportation,

____________________________

JOSEPH M. SOUKI, Chair